* Canadian dollar at C$1.3044, or 76.66 U.S. cents
* Loonie touches its strongest intraday since June 14
* Price of U.S. oil falls 1.5 percent
* Bond prices lower mixed across a flatter yield curve
By Fergal Smith
TORONTO, July 31 (Reuters) - The Canadian dollar dipped
against the greenback on Tuesday, with the currency pulling back
from a nearly seven-week high intraday as trade uncertainty and
lower oil prices offset data showing the domestic economy
expanded more than expected in May.
At 9:19 a.m. EDT (1319 GMT), the Canadian dollar
was trading 0.1 percent lower at C$1.3044 to the greenback, or
76.66 U.S. cents.
The currency's weakest level of the session was C$1.3097,
while it touched its strongest since June 14 at C$1.2992.
Canada's economy grew by 0.5 percent in May, the biggest
rise in a year, as industries recovered from a combination of
bad weather and maintenance shutdowns in April, Statistics
Canada said.
Chances of a Bank of Canada interest rate hike by October
rose to 68 percent from 62 percent before the data, the
overnight index swaps market indicated.
"Incrementally, it should support tightening," said Eric
Theoret, currency strategist at Scotiabank. "Trade is still very
much at the forefront, and I think that's what markets are a bit
more concerned about and I think that's why we haven't seen CAD
strengthen as much as we would maybe have expected."
Canada has been negotiating with the United States and
Mexico to revamp the North American Free Trade Agreement. The
United States and Mexico plan to hold ministerial-level NAFTA
trade talks on Thursday in Washington, the second such meeting
within a week.
The price of oil, one of Canada's major exports, fell after
a survey showed OPEC's output hit a 2018 high in July,
reigniting concern about supply swamping demand.
U.S. crude prices were down 1.50 percent at $69.08 a
barrel.
Canadian government bond prices were mixed across a flatter
yield curve, with the two-year down 0.5 Canadian cent
to yield 2.053 percent and the 10-year rising 2
Canadian cents to yield 2.297 percent.
Canada is finding it harder to attract the foreign
investment in its bonds and stocks that it needs to finance a
current account deficit, as yields rise at a faster pace in the
United States and structural headwinds stifle prospects for the
domestic economy.
(Reporting by Fergal Smith; editing by Jonathan Oatis)